Correlation Between China Telecom and Nintendo

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Can any of the company-specific risk be diversified away by investing in both China Telecom and Nintendo at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Telecom and Nintendo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Telecom and Nintendo Co, you can compare the effects of market volatilities on China Telecom and Nintendo and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Telecom with a short position of Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and Nintendo.

Diversification Opportunities for China Telecom and Nintendo

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between China and Nintendo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo and China Telecom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Telecom are associated (or correlated) with Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of China Telecom i.e., China Telecom and Nintendo go up and down completely randomly.

Pair Corralation between China Telecom and Nintendo

If you would invest (100.00) in China Telecom on December 30, 2023 and sell it today you would earn a total of  100.00  from holding China Telecom or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

China Telecom  vs.  Nintendo Co

 Performance 
       Timeline  
China Telecom 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days China Telecom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, China Telecom is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Nintendo 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nintendo Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nintendo may actually be approaching a critical reversion point that can send shares even higher in April 2024.

China Telecom and Nintendo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Telecom and Nintendo

The main advantage of trading using opposite China Telecom and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom position performs unexpectedly, Nintendo can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nintendo will offset losses from the drop in Nintendo's long position.
The idea behind China Telecom and Nintendo Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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